Government secured a little above ¢862 million from the sale of the 5-year Treasury bond, slightly below the ¢1.0 billion target.

According to auctioning results by the Bank of Ghana, government accepted all the bids tendered in.

The interest rate was however 20.75%, higher than the 19.75% paid for the 2-year bond issued in February 2022.

The Initial Pricing Guidance was between 20% and 20.75%.

But Joy Business understands that the price of the debt instrument was in line with secondary market conditions, as investors demanded higher premium for the new issuance.

This is as a result of the rising inflation, the depreciation of the cedi and uncertainty about the Bank of Ghana’s policy rate which is creating a higher level of uncertainty about the direction of yields of Government of Ghana bonds.

Analysts, however, believe the amount raised was broadly expected given the absence of non-resident investors in the acquisition of the bond.

Presently, domestic interest payments accounts for about 78% of total interest rate payments.

With the prevailing upside risks to domestic interest rates, aggressive control of government spending is very important since the era of cheap money is over.

The 5-year bond will mature in 2027.

Absa, Black Star, CalBank, Databank, Ecobank, Fidelity, GCB, IC Securities and Stanbic Bank were the sponsoring firms or bond market specialists.